State Officials Warn of Business-Filing Scam – Hartford Courant

The letters, sent to businesses across Connecticut from the “Division of Corporate Services,” look vaguely official, with citations to state statutes and an assurance that completing the included form — and paying the $150 fee — “will fulfill your corporation’s records requirement” under Connecticut law.

But the mass mailing, state officials say, is part of a fraudulent nationwide campaign to trick business owners into paying money for an unnecessary and meaningless service.

“This scam attempts to collect money from companies that need to comply with a state reporting requirement,” said Commissioner of Consumer Protection Jonathan Harris. “There is absolutely no value in responding to this fake mailing and we urge companies to ignore it; do not send payment.”

Connecticut is joining at least 15 other states that have warned about, or taken action against, Division of Corporate Services and related firms that solicit businesses with what officials say is a deliberate attempt to mimic an official government document. Calling the toll-free number listed on the form may only compound the confusion, beginning with the official-sounding announcement: “You have reached the compliance department of the Division of Corporate Services.”

The Connecticut mailing instructs business owners to list their shareholders and directors, saying that the form satisfies state laws requiring some corporations to hold an annual shareholder meeting and to keep minutes of all shareholder and board meetings. As in other states, the Connecticut mailing lists a local address that is merely a rented UPS mailbox.

State officials say those laws do not require businesses to submit any information, and it’s unclear how a form listing directors and shareholders would satisfy a law requiring the keeping of minutes.

“Businesses registered with the state of Connecticut are required by law to file only annual reports with our office, which are very minimal in nature,” Secretary of the State Denise Merrill said. “There is no legal requirement for any business to file the minutes or bylaws that this company is offering to file, in exchange for payment.”

The form states that the Division of Corporate Services “does not officially represent the state of Connecticut or any other government entity,” but critics say harried businesspeople could easily be misled.

“The mailing itself looks very official, and many people who run small companies might be too busy to inspect it carefully before just writing a check,” said Steve Ellwanger, who created a limited liability company in Stamford in December, and received the Division of Corporate Services mailing last week.

“After reading it closely a few times, it wasn’t clear to me exactly what I would be getting for my $150,” Ellwanger said. “If whoever is behind the letter can explain that in clear terms, it would be quite helpful. If not, it’s quite annoying.”

One of the people behind the letter is Tate Howe, who incorporated Division of Corporate Services in Florida in March and has registered at least eight business-filing websites, including corporateservicesdivision.us, annualbusinessservices.us and quickcomplyapp.com. The websites are registered to Howe at addresses in St. Petersburg and Largo, Fla., although he currently lists his location as the San Francisco Bay area, where he is working on his latest project, a website that helps companies keep track of tax and compliance deadlines.

In an email Thursday, Howe wrote: “appreciate you reaching out. I’m not the person who would comment on that company though. I’m in CA working on something completely different.” In response to a follow-up email, Howe added: “We were testing a mailer to sell a service that we offer. We got bad feedback and have since stopped sending it and do not plan to resume. We have a refund policy in place where we will refund anyone who is not happy with our service.”

Chad Davis, listed in corporation papers as the company’s president, did not respond to a telephone message left Thursday at the business’s St. Petersburg headquarters, where an employee said Davis works.

Howe’s current venture has a public profile, with a website and mentions on Howe’s LinkedIn page and Twitter feed. Division of Corporate Services maintains a much lower profile, but it has caught the attention of attorneys general and other officials across the country, who have uniformly criticized the company’s mailings.

Last month, Nevada and Idaho issued warnings about Division of Corporate Services, with the Nevada secretary of state saying the mailings violated state law and the Idaho attorney general deriding them as “deceptive” and “bogus.” And just days ago, North Carolina officials advised local businesses to ignore solicitations sent by Annual Business Services, another firm run by Howe.

“These are sleazy operators who know the letters they are sending out are misleading and nothing more than attempts to scam business owners out of money,” North Carolina Secretary of State Elaine Marshall said.

North Carolina officials also ordered Howe to cease sending letters to businesses in the state and said they planned to intercept any checks sent to the company’s rented mailbox and return them to the businesses that had sent them.

Connecticut Attorney General George Jepsen said his office has received about a dozen complaints from business owners who received the mailing.

“While our agencies are investigating this, I urge businesses and consumers to stay vigilant and to make very sure that any unsolicited requests for payments — whether they are suspicious-looking invoices or forms such as this that appear to reference legal requirements — are truly official before sending payment,” he said.

It is unknown how many businesses have sent money in response to the Division of Corporate Services solicitation, but a recent help-wanted ad suggests the operation is lucrative. In craigslist ads in the past month, Division of Corporate Services has sought several new employees for its “growing business” in downtown St. Petersburg, including “several phone sales reps.”

“We receive hundreds of inbound calls daily from people requesting services for their business,” the ad states. “The job is 100% commission based. Current sales reps earn between $500 – $1000 per week. The only limitation is how many times you can pickup the phone.”